Average Net Worth By Age – Where Do You Fall in Comparison?
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Scrolling Instagram and other social media can be a fun way to compare yourself to your peers, though the anxiety of FOMO could send you back to bed.
But instead of viewing the glamorous photos of your friends’ vacations or a dinner plate that a waiter has just put down in front of them, you might find more joy in comparing your net worth to your peers in your age group. It might at least answer any curiosities about the average net worth for an American and where you fall.
Determining net worth is a simple calculation, but we’ll do most of the work for you in this story. We’ll show you the median and average net worth by age group, and review the main factors that affect it. All you have to do is figure out your net worth on a net worth calculator.
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What is net worth?
Net worth is the value of what you own minus what you owe. It’s a way to determine, in theory, how much you’d have in cash if you sold everything you own and paid off all your debts.
It’s computed by adding up the value of your total assets, such as real estate, cars, investment accounts, and savings accounts, and subtracting your liabilities such as student loans, mortgages, credit card debt, and bills due.
A net worth calculator can be found in many places online, requiring you to input numbers from your financial statements. Plus, you can determine your net worth here.
Knowing your net worth and comparing it with others in your age group can help determine if you’re spending too much money and give an overall picture of where your money goes. From there, you can decide on better uses for your money so that your net worth can hopefully grow to become a high net worth.
Net Worth Calculator
Average American net worth
The overall mean or average household net worth is $748,800, according to the latest data from the Federal Reserve Board. The amount is high because high-income households drive the average up.
But if you look at the overall median net worth of U.S. households, the number drops to $121,700, which is a more accurate way to look at net worth.
That’s because median is the midpoint value and is a more accurate representation of the everyday American.
The numbers come from the Survey of Consumer Finances, which the Federal Reserve Board computes every three years in a report about the median net worth, family incomes, and more. The last report was released in September 2020 from data collected in 2019 and compares 2016 to 2019. (The next report will come out in fall 2023.) During that time, the median net worth for all families increased 16%, and the mean net worth increased only 2%.
Net worth by age
Net worth is affected by age, income, education, and other factors, which we’ll go into more next. But first, here are the median and average net worth figures by age in 2019, according to the 2020 Survey of Consumer Finances.
Age | Median net worth | Average, or mean, net worth |
Less than 35 | $13,900 | $76,300 |
35-44 | $91,300 | $463,200 |
45-54 | $168,600 | $833,200 |
55-64 | $212,500 | $1,175,900 |
65-74 | $266,400 | $1,217,700 |
75+ | $254,800 | $977,600 |
Characteristics of families that affect net worth
Age affects net worth in a few ways and is tied to factors such as income, education, retirement savings, and if you’re a homeowner. The data shows that net worth differs by race and where you live.
Income is an easy factor to understand in how it affects net worth because net worth tends to rise systematically with income. The more money you earn, the more likely you will save more and have more assets.
Net worth generally increases with age until it plateaus or decreases modestly for the oldest age groups as they reach retirement age and spend their retirement savings.
Education is the biggest factor in building wealth and has a high median net worth, with college graduates having more than four times the net worth of high school graduates.
The federal study found that in 2019 the head of the family who had a college degree had a median net worth of $308,200, compared to $20,500 for those with no high school diploma, $74,000 for those with a high school diploma, and $88,800 for those with some college.
There was also a huge gap in net worth by housing status. Homeowners in 2019 had a median net worth of $255,000, compared to $6,300 for renters or other housing statuses. People who lived in metropolitan areas had a higher net worth than those in non-metro areas.
Race or ethnicity was another big factor. Here are the 2019 median net worth figures by race or ethnicity:
- White non-Hispanic: $188,200
- Black non-Hispanic: $24,100
- Hispanic or Latino: $36,200
- Other or multiple races: $74,500
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Where most assets are held
You probably have a bank account and car, as most people do. But do you invest in the stock market, own savings bonds, nonresidential property, or other assets that the average American does?
Here are some of the biggest assets held in 2019, starting with the percent of people holding them and the conditional median value, according to the Survey of Consumer Finances:
Type of asset | % holding | Conditional median value |
Transaction accounts | 98.2% | $5,300 |
Vehicles | 85.4% | $17,200 |
Primary residence | 64.9% | $225,000 |
Retirement accounts | 50.5% | $65,000 |
Cash value life insurance | 19% | $9,000 |
Pooled investment funds | 9% | $110,000 |
Business equity | 13.4% | $89,100 |
Equity in non-residential property | 6.7% | $72,000 |
Other residential property | 13.1% | $160,000 |
Stocks | 15.2% | $25,000 |
Bonds | 1.1% | $121,000 |
Almost everyone has transaction accounts, which include checking, savings, money market, call accounts, and prepaid debit cards. Some can earn compound interest. But the median value is only $5,300. That makes sense because they’re mostly used for spending money.
A lot of your net worth may not be in cash that you can use immediately but in assets such as cars and property that you may have a loan out on. And even if you own your car or home, you could sell it for cash, but you’d still need a place to live or a car to get to work.
A majority of the value of your assets is held in vehicles and homes. The term “house rich, cash poor” applies here because while a homeowner may have equity built up in their home, it isn’t necessarily money they can spend elsewhere while living there.
Retirement accounts are another asset that doesn’t add to your immediate wealth. Most people pull money from retirement accounts when they reach retirement age, such as in their 60s or later, and don’t use the fund to pay for expenses when they’re younger.
Types of debt
The report also lists various types of debts, with about 77% of families holding some type of debt. The conditional median value of debt was nearly $65,000 in 2019. Too much debt can also affect your credit score.
Here are some of the main types of debt in 2019, listed by the percentage of households holding the debt and the condition median value of the debt.
Type of debt | % holding | Conditional median value |
Credit card balance | 45.4% | $2,700 |
Primary residence loan | 42.1% | $134,800 |
Other property loan | 4.7% | $122,000 |
Education loans | 21.5% | $22,300 |
Vehicle loans | 36.9% | $13,100 |
What it means to know your net worth
Having a high net worth doesn’t necessarily mean you’re wealthy. It’s a measure at one point in time of how much money you’d have if you had to sell everything and pay off all of your debts. It could be a negative number, meaning you owe more than you own.
Whatever the figure is, don’t take it as a measure of who you are. A high number doesn’t always equate to a high standard of living. A high home loan can raise your net worth, but low home equity and no plans to sell it, along with no savings, can leave you to cash poor.
But knowing what your net worth is, and comparing it to others in your age group, can motivate you to reach some financial goals. For instance, if you’re 40 and your net worth is less than the median of $91,300, then you may want to work toward finding a better job that pays more.
Or you may decide to put off buying a new car or putting too many expenses on a credit card so that your debts don’t grow. Maybe you can work an extra job to help pay off student loan debt.
For most people, their income and net worth grow over time as they hit their peak earning years between the ages of 35 and 54. You’ll likely gain more home equity as you age and own a home, and your retirement savings should increase.
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How to raise your net worth
Since net worth isn’t a fixed number but is a figure that can change over time as your financial situation changes, it’s worth remembering that you can work to change your net worth at any time. If your personal finance goals change and you work to improve them, your net worth will likely grow.
Here are some ways to raise your net worth:
Pay off debts
Debts with the highest interest rates should be paid off first, such as credit cards with interest rates of 20% or higher. Personal loans not backed by collateral can also be expensive and should be paid off as quickly as possible.
Save more
Ideally, an emergency fund should cover three to six months of living expenses in case you lose your job. An emergency fund can also be used to cover unforeseen expenses such as a hospital stay, car repair, or new appliances.
You can also save more by cutting expenses, starting a college fund for your children, opening a retirement account, and making low-risk investments.
As part of your savings goals, you may want to ensure you have enough liquid assets to cover emergency expenses, meaning you can sell them quickly.
Create a budget
A household budget isn’t used to determine your net worth, but it can be a way to find ways to cut expenses and see where your money goes every month. If you’re figuring out your net worth but don’t have a spending budget, you’re putting the horse before the cart.
Add income
A basic way, though not always easy, to raise your net worth is to add to your income. You can try to earn some passive income through investments or buying rental property. Setting up a few income streams is a good idea so that your income is diversified.
Pros and cons
Pros
- Knowing your net worth by your age group will give you an idea of where your personal finances should be at this stage of life so you can make changes.
- Your net worth should increase over time, especially if you buy a home, keep debts low, fund retirement accounts, and get a college degree.
- From 2016 to 2019, the median net worth for all families increased by 16%.
Cons
- Your net worth is only a measurement of one time in your financial life, so you may want to calculate it yearly.
- Net worth is also a way to tell you if you could pay off all of your debts by selling everything you own. That’s unlikely ever to happen, but knowing the figure can help you in other ways.
- If your net worth is negative, you may want to look for a financial planner for help.
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The bottom line
Calculating your net worth shouldn’t take much time and is something you can do on your own. Once you figure out your net worth, you can compare it to others in your age group to see if your finances are where they are for most people your age.
If not, it’s no reason to panic. You may live a much less expensive lifestyle than the average person, and that can be a great thing. Or it could be a sign that you’re not planning for life’s emergencies, retirement, or helping your children pay for college.
But at least you’ll know what your net worth is and can act to improve it if you want to. Scrolling through your friends’ social media feeds is unlikely to accomplish anything close to that.
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Writer
Aaron Crowe is a freelance journalist who specializes in personal finance writing and editing. He has worked at newspapers, where he won a Pulitzer Prize, and has written for numerous online publications. These include AOL, US News & World Report, WiseBread, Bankrate, AARP, and many websites focusing on housing, credit and insurance. He lives in California with his wife and daughter.
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